A group of former Trimark Financial Corp. managers are launching a closed-end fund that will invest in global stocks and also give investors part ownership in a private wealth management company.
Cymbria Corp. has filed a preliminary prospectus to offer its Toronto Stock Exchange-listed class A non-voting shares at $10 each.
Cymbria investors will have the opportunity to hold up to 40 per cent in EdgePoint Wealth Management Inc., which will be indirectly controlled by former Trimark managers Tye Bousada, Patrick Farmer, Geoff MacDonald and Robert Krembil, according to the prospectus. EdgePoint plans to sell mutual funds through independent financial advisers.
"It is a really unique structure," independent fund analyst Dan Hallett said yesterday. "They are essentially placing a chunk of their private company in this investment.
"It is a big incentive for people to buy - not only the investment skill of Tye Bousada and Geoff Macdonald - but also ride on the coattails of the growth of their company."
Cymbria intends to issue class J non-voting shares through a private placement. The former Trimark managers will hold a total of $22-million in J and A shares.
Trimark Financial, a Toronto-based fund company co-founded by Mr. Krembil in 1981, was bought in 2000 by Atlanta-based global asset manager Invesco Ltd., formerly known as Amvescap PLC.
Its Canadian subsidiary, which recently changed its name to Invesco Trimark Ltd. from AIM Funds Management, has been suffering from net redemptions over the past year, partly due to the departure of key managers such as Messrs. Farmer, Bousada and MacDonald.
Independent investment analyst Peter Loach echoed that Cymbria is an "innovative" fund, saying it allows investors to benefit even when markets aren't rising. The wealth management business makes money even when markets are down because of management fees charged on mutual funds, he said.
EdgePoint will be the newest kid on the block in the domestic fund industry, and compete in the same space as much bigger firms like Invesco Trimark, CI Financial Income Fund, Mackenzie Financial Corp., Dynamic Mutual Funds Inc. and AGF Management Ltd.
EdgePoint has the advantage of having "one of the strongest lineups" of fund managers and the behind-the-scenes expertise of Mr. Krembil, "who is a living legend in investing," Mr. Loach added. The stocks held by Cymbria will be chosen according to Mr. Krembil's value-oriented approach of looking for undervalued businesses and holding them until the market recognizes their potential.
EdgePoint has also hired Geoff Goss, who is considered one of the top marketers to advisers in the industry, and is a veteran of Trimark Financial and, more recently, Brandes Investment Partners & Co., Mr. Loach noted.
Patrick Farmer Joined Trimark Financial in 1993 Was former chief investment officer at Invesco Trimark Will be chief executive officer of EdgePoint Wealth Management Inc.
Tye Bousada Joined Trimark Financial in 1999 after a stint with the Ontario Teachers' Pension Plan Board Was formerly the lead manager on the giant Trimark Fund
Geoff MacDonald Joined Trimark Financial in 1998 after a stint with the Ontario Teachers' Pension Plan Board Was formerly the lead or co-manager on Trimark Income Growth, Trimark Canadian Endeavour and Trimark Endeavour funds
Co-founder of Trimark Financial
CEO of the publicly traded
company until it was sold
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